Last week, printer and copier OEMs finished reporting their financial results for the quarter ended on September 30, 2016. For all the Japanese OEMs, except Canon, this period is the second quarter of the fiscal year that will end on March 31, 2017. For Canon and U.S.-based OEMs Lexmark and Xerox, this period is the third quarter of the fiscal year that will end on December 31, 2016. HP Inc. uses a different financial calendar, so the results discussed here are for HP’s third quarter, which ended on July 31, 2016. HP will report is fourth-quarter financial results on November 22.

Actionable Intelligence currently covers financial results from traditional printer and copier OEMs including Brother, Canon, Epson, Fujifilm, HP, Konica Minolta, Lexmark, OKI, Ricoh, and Xerox. Our detailed coverage of how these companies are performing—especially in their printer/MFP businesses—is available only for Actionable Intelligence subscribers.

Key takeaways from these firms’ most recent financial quarters are as follows:

It was pretty clear from the year’s start that most OEMs expected a downbeat year, and the situation has not improved now that we are two or three quarters into the year. In their most recent quarter, all printer and copier OEMs saw their key printing businesses report that revenue declined compared with the same period one year ago (see chart below; click to expand). Most firms reported steep year-over-year declines in operating profit; however, there were exceptions. HP posted a modest improvement in operating profit in its Printing business, and Lexmark posted a significant improvement. Brother was the lone Japanese OEM to post a big year-over-year increase in operating profit. Brother indicates it has been working hard to cut costs in its Printing business—hence the increase.

One big reason for all the declines posted at OEMs based in Japan is the yen’s appreciation against other world currencies. In 2013 and to a lesser extent 2014, Japanese OEMs’ financials received an enormous boost from the yen’s historic depreciation. That effect lessened in 2015 as the yen began to appreciate. Now the pendulum has swung fully the other way, with the yen’s rapid appreciation leading most companies based in Japan to post big year-over-year declines in revenue and profits.

Many OEMs also continue to complain about economic stagnation in emerging markets such as China, Southeast Asia, Latin America, and Russia.

Japanese OEMs present more detailed forecasts for the year ahead than their U.S. counterparts. In general, most OEMs appear to have been surprised by how bad the current fiscal year is shaping up to be due to the yen’s appreciation and overall weak macroeconomic conditions. When we summarized the financial outlook for OEMs last quarter (see “The Big Picture: OEM Financials for the Quarter Ended in June”), we noted that of the 10 OEMs whose financials Actionable Intelligence follows, five adjusted their forecasts in July and August, and most of the revisions were downward. This quarter, eight out of 10 OEMs revised their guidance and all the moves were downward, except for Brother raising its profit outlook.

And if we look at what the latest forecasts actually are for the year ahead, that is pretty gloomy as well. OEMs overwhelmingly expect to see their revenue and profits decline in the year ahead. Exceptions are Fujifilm, which expects a 0.4 percent rise in operating profit, and Konica Minolta, which expects a 12.6 percent increase in net profit.

While it is not a great year, to be sure, there are market bright spots. Most OEMs are seeing growing demand for inkjet devices that use high-capacity ink tanks and offer lower page costs. The higher end of the color MFP market is also performing well.

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